gression. When under the by-laws a certain offense is made punishable by fine, an offending member otherwise in good standing can not be expelled therefor; and when a member is expelled nominally for an offense which would warrant expulsion but in reality for an offense punishable by fine only, he will be reinstated by the courts.2 § 325. Construction - Pleading. A by-law may be good in part and partly void. Where there are several distinct by-laws, one may be void and the other good; where they are combined, and yet the parts are separable, the same rule applies to the separate parts; but where they are so framed as to be inseparable or to depend upon each other, if part be void the whole is void. Where a by-law is open to two constructions and according to one it would be illegal, the court will prefer to adopt the other, although in that event the facts of a particular case will constitute a breach. Although the rules and regulations of a society or order enter into and become a part of the contract of life insurance which it makes with its members, its own practice or opinion as to the meaning of the words used to express the rule or regulation in controversy is not binding on the courts, in construing the contract, if the language be plain, unambiguous, and well understood to have a fixed meaning, either generally or as a technical term of the law. The latter meaning will be given to the words used as in other cases for the interpretation of 1 Endlich on Building Associa tions, § 412, citing Citizens' Mutual Loan & A. F. Assoc. v. Webster, 25 Barb. 263. 2 Otto v. Journeyman Tailors' Protective & Benev. Union, (1888) 75 Cal. 303; s. c. 7 Am. St. Rep. 156. 3 Rogers v. Jones, 1 Wend. 260. 4 Lumley on By-Laws, 157, citing Fazaherley v. Wiltshire, 1 Stra. 469; Gunmakers' Co. v. Fell, Willes, 390; Regina v. Lundie, 5 L. T. N. S. 831; Queen v. Saddlers' Co., 32 L. J. Q. B. 345; King v. Company of Fisher 66 man, 8 Term Rep. 357, where it was said by Lord Kenyon, though a by-law may be good in part, yet it can be so only where the two parts are entire and distinct from each other." Clark v. Denton, 1 Barn. & Ad. 97: Stationers' Co. v. Salisbury, Comb. 222. 5 Lumley on By-Laws, 269, citing Dearden v. Townsend, L. R. 1 Q. B. 10; Eagleton v. East India Co., 3 Bos. & P. 55; Great Western Ry. Co. v. Goodman, 21 L. J. C. P. 197. contracts. In actions arising under the by-laws of a corporation they must be set forth in the plea lings; and an omission to do so may be taken advantage of by demurrer.2 Corporations must show their power to pass by-laws, and must bring themselves by proof within that power.3 I Wiggin v. Knights of Pythias, (1887) 31 Fed. Rep. 122. 2 Harker v. Mayor, 17 Wend. 199, in any court whether of record or not. 3 Dunham v. Trustees of Rochester, 5 Cow. 462; Taylor v. Griswold, 2 Green, 223. § 326. Introductory. CHAPTER XVII. CONSOLIDATION. 327. What amounts to consolida tion. 328. Manner of effecting. 329. The same subject continued. 330. Public policy. 831. Prohibitions of consolidation. 332. Power of the legislature to authorize. 333. Legislative authority requisite. 334. How legislative sanction may 335. Inter-State consolidation. dated companies. 337. Powers and duties of inter State companies. 838. Dissolution of old companies. 339. The same subject continued. 340. Rights of consolidated companies. § 341. Public rights and duties of the new company. 842. Right of the new company to 344. The same subject continued. 347. Judgment against the new 348. Debts of the old companies. 352. Exchange of new stock for 353. Consent of shareholders. § 326. Introductory.-The word "consolidation" is used to denote "any conjunction or union of the stock, property or franchises, of two or more corporations whereby the conduct of their affairs is permanently, or for a long period of time, placed under one management, whether the agreement between them be by lease, sale or other form of contract, and whether its effect be the dissolution of neither of the companies, or whether one of them be dissolved and its existence be merged in the corporate being of the other, or whether it result in the dissolution of both companies and the creation of a new corporation out of such portions of the original companies as enter into the new." In England the term amalga 1 Beach on Railways, § 535. mation is used instead of consolidation; and an amalgamation is assumed to be where the existing companies agree to abandon their respective articles of association and regulations, and to register themselves under new articles as one body. This would be a new company formed by the coalition or amalgamation of the companies previously existing. Some difficulty which the English courts had with the name amalgamation was really an effort to make the substance of the thing itself comport with the ordinary principles of law applicable to the liability of the stockholders and the payment of creditors of the companies amalgamated. In one case the court said that on general principles two companies may be united either by fusion into a third, or by one absorbing the other; that the former process seems to correspond most nearly with the popular sense of the word amalgamation, but that nobody really knows what amalgamation means. Whatever be the process, however, no shareholder in the company which it destroys, or of which it suspends the life, can become a shareholder in the other company without his personal assent. In another case it was said that if amalgamation was to be considered as meaning the power of transferring the whole business of one company to another-in other words, the annihilation of the lesser company in which the shareholders in the one company were to be compelled to participate in the liabilities of that company, however different their objects, it might be contended that a member of an insurance company might be compelled against his will, to become a 1 In re Bank of Hindustan, 2 Hen. & M. 666; Clinch v. Financial Co., L. R. 4 Ch. App. 117: In re Empire Assur. Co., L. R. 4 Eq. 341. 2 Dougan's Case, (173) 28 L. T. N. S. 60. Nobody, said Lord Westbury, uses the word amalgamation with any definite meaning, and the word which his lordship has suggested to replace it, the word which will best express the peculiar process by which one joint stock company endeavors, usually with indifferent success, to put an end, as far as it can, to its own existence, is a "weld ing," a word which necessarily implies the rule of law that one company can not so sink its existence in that of another, can not so vanish into thin air and leave its creditors going blankly into space, as under the guise of amalgamation it will endeavor to do; that its existence must necessarily continue until its liabilities have been discharged, until every creditor who is interested in the prolongation of its existence has received that satisfaction which he is entitled to demand. Blundell's Case, 17 Sol. J. & Rep. 87, 362. member of a loan, guaranty, or other speculative company.1 It has been held in England that when two companies amalgamate, the shareholders of each become the shareholders and partners in another company. In this country it has been held that where several railroad companies were by virtue of the act of union, "merged in and constituted one body corporate" under the name of one of them, and all were continued in existence, it was to be a consolidation; but that where by the very terms of the statute and the deed, the first corporation was extinguished, and the second only continued to exist, the case was not one of mere consolidation or amalgamation. An unincorporated Masonic lodge in existence before the organization of its members into a corporation of the same name, is not merged into the latter. Even an absolute identity of membership would not of itself lead to any such result. The same persons may be members in the same or different proportionate interests, of as many distinct bodies, incorporated and unincorporated, as they choose to organize. The word consolidate in a constitutional prohibition applying to parallel and competing lines, is used in the sense of join or unite, and the law is not to be evaded by the substitution of 1 In re Empire Assur. Co., 16 L. T. N. S. 346. The case was this: The articles of association of an insurance company contained a clause empowering the directors, with the consent of an extraordinary general meeting, "to transfer and sell the business of the company, or purchase or amalgamate with the business of any other company of like nature." This company sold itself to a company whose business it was to purchase the business of other assurance companies; to carry on the business of fire and life assurance, and that of a loan company; to guaranty fidelity; to advance money on houses, and to purchase lands. Afterwards the purchasing company was wound up and some shareholders of the selling company were placed upon the list of contributaries of the amalgamated companies. They objected that the sale or amalgamation was invalid, being ultra vires, the business not being of the like nature, and therefore that they were shareholders in the former company only, which was still in real existence. The court so held and remarked that it was difficult to define exactly the meaning of the term " amalgamation," but that it was not sufficiently potent to compel a shareholder in one company to enter upon all the liabilities of another company totally different in its objects. It could not make a man a partner in a concern of the objects of which he was totally ignorant, and which he had never consented to join. 2 Drew's Case, 16 L. T. N. S. 657. 3 Powell v. North Missouri R. Co., 42 Mo. 63. 4 Mason v. Finch, (1873) 28 Mich. 282. |